Air Force awards $152M for airborne networking, with Sierra Nevada Company as sole provider

Contract Overview

Contract Amount: $152,090,201 ($152.1M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2019-12-20

End Date: 2026-05-31

Contract Duration: 2,354 days

Daily Burn Rate: $64.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AIRBORNE MISSION NETWORKING LOW RATE INITIAL PRODUCTION AND SPARES

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $152.1 million to SIERRA NEVADA COMPANY, LLC for work described as: AIRBORNE MISSION NETWORKING LOW RATE INITIAL PRODUCTION AND SPARES Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Long performance period of 2354 days suggests a sustained need for these services. 3. The contract is for a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, indicating a pre-existing relationship. 4. Fixed-price contract type aims to control costs, but limited competition may offset this. 5. The North American Industry Classification System (NAICS) code 488190 points to support activities for air transportation. 6. No small business set-aside was utilized, suggesting the primary contractor is not a small business.

Value Assessment

Rating: questionable

Benchmarking the value for this specific contract is challenging due to its sole-source nature and the lack of publicly available comparable contract data. The firm fixed-price structure is a positive indicator for cost control, but without competitive bidding, it's difficult to ascertain if the pricing reflects true market value. The total award amount of over $152 million over a multi-year period warrants scrutiny to ensure efficient use of taxpayer funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sierra Nevada Company, LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price discovery and potentially higher costs for the government compared to fully competed contracts.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts, potentially reducing innovation and increasing costs for taxpayers due to the absence of competitive pressure.

Public Impact

The primary beneficiary is the Department of the Air Force, which will receive enhanced airborne networking capabilities. Services delivered include the production and provision of spares for airborne mission networking systems. The geographic impact is likely global, supporting Air Force operations worldwide. Workforce implications may include specialized technical roles within Sierra Nevada Company, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs.
Lack of transparency in the justification for sole-source award.
Long contract duration could lead to cost overruns if not managed effectively.

Positive Signals

Firm fixed-price contract type helps to manage cost uncertainty.
The contractor, Sierra Nevada Company, LLC, is likely an established provider with relevant expertise.
Delivery order structure suggests it's part of a broader, potentially strategic, acquisition plan.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Airborne mission networking is a critical component of modern military operations, enabling secure and reliable communication for aircraft. This contract falls within the broader category of aerospace product and parts manufacturing and related support services. Spending in this area is substantial, driven by the need for advanced defense capabilities, with major players often holding sole-source or limited-competition contracts for specialized systems.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by the 'sb' field being false. Consequently, there are no direct subcontracting requirements mandated for small businesses within this specific award. This suggests that the primary contractor, Sierra Nevada Company, LLC, is expected to perform the majority of the work, and opportunities for small businesses to participate through subcontracting may be limited unless voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature, enhanced scrutiny from oversight bodies, such as the Government Accountability Office (GAO) or the Inspector General (IG), might be warranted to ensure the justification for the award and the pricing are sound. Transparency regarding the specific justification for the sole-source award and ongoing performance monitoring will be key accountability measures.

Related Government Programs

Airborne Command, Control, and Communications Systems
Military Aircraft Production
Defense Communications and Surveillance Systems
Aerospace Support Services

Risk Flags

Sole-source award may indicate a lack of competition, potentially leading to higher prices.
Long contract duration increases the risk of technological obsolescence.
Lack of transparency regarding the justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $152.1 million to SIERRA NEVADA COMPANY, LLC. AIRBORNE MISSION NETWORKING LOW RATE INITIAL PRODUCTION AND SPARES

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $152.1 million.

What is the period of performance?

Start: 2019-12-20. End: 2026-05-31.

What is the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis to Sierra Nevada Company, LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Without the official justification document, it is impossible to ascertain the precise reasons. However, common justifications include unique technical capabilities, proprietary technology, or the need to maintain compatibility with existing systems where no other vendor can meet the requirements. Further investigation into the contract file or agency justifications would be necessary to determine the exact rationale.

How does the firm fixed-price (FFP) contract type mitigate risks associated with the sole-source award?

The firm fixed-price (FFP) contract type is designed to shift cost risk from the government to the contractor. Under an FFP agreement, the contractor agrees to a set price for the work, regardless of the actual costs incurred. This structure provides cost certainty for the government and incentivizes the contractor to manage its expenses efficiently to maximize profit. While FFP is generally a preferred contract type for managing costs, its effectiveness in mitigating risks associated with a sole-source award is limited. The absence of competition means the initial price may not be as competitive as it could be in a bidding scenario. However, the FFP structure does ensure that the government's financial exposure is capped at the agreed-upon price, preventing cost overruns beyond that amount.

What is the historical spending pattern for airborne mission networking systems by the Department of the Air Force?

Analyzing historical spending patterns for airborne mission networking systems by the Department of the Air Force requires access to comprehensive federal procurement data. While this specific contract award is for approximately $152 million, understanding the broader trend involves examining spending over multiple fiscal years and across various contracts and programs related to airborne communications and networking. Factors such as technological advancements, evolving mission requirements, and strategic defense priorities influence these spending patterns. Without a detailed historical analysis of related contracts, it's difficult to provide specific figures. However, it is generally understood that the Department of Defense invests heavily in maintaining and upgrading its communication and networking infrastructure to ensure operational effectiveness and information superiority.

What are the potential implications of a long contract duration (2354 days) for performance and cost management?

A long contract duration, such as 2354 days (approximately 6.5 years), presents both opportunities and challenges for performance and cost management. On the positive side, it can provide stability and predictability for the contractor, allowing for better resource planning and potentially economies of scale. It also reduces the administrative burden associated with frequent re-competition. However, long durations increase the risk of technological obsolescence, especially in rapidly evolving fields like networking. For cost management, it necessitates robust mechanisms for tracking performance and ensuring that costs remain aligned with the initial fixed price, particularly if economic price adjustments are included. The government must maintain vigilant oversight to ensure the contractor remains efficient and that the delivered technology remains relevant throughout the contract period.

Are there any known performance issues or track record concerns with Sierra Nevada Company, LLC on similar defense contracts?

Assessing the performance track record of Sierra Nevada Company, LLC on similar defense contracts requires a review of past performance information, which is not detailed in the provided data. Generally, federal agencies maintain past performance databases that inform source selection decisions. If this contract was awarded sole-source, the agency likely had a basis for believing Sierra Nevada Company, LLC possessed the necessary capabilities and a satisfactory performance history. However, without access to specific performance reviews, contract award histories, or any potential disputes or terminations related to their prior work with the Department of Defense or other federal agencies, it is impossible to definitively state whether there are any performance concerns. A thorough due diligence would involve consulting these records.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA850920R0011

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 444 SALOMON CIR, SPARKS, NV, 89434

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $152,090,201

Exercised Options: $152,090,201

Current Obligation: $152,090,201

Actual Outlays: $423,548

Subaward Activity

Number of Subawards: 245

Total Subaward Amount: $76,310,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA850919D0001

IDV Type: IDC

Timeline